One of the main concern of power system restructuring in developing countries is to divest the asset to private sector. Divestment of electricity distribution companies is more critical and has vital role in the electricity supply chain because of vicinity to customer. This paper tries to develop the company valuation approach of electricity distribution companies. For valuation of these types of companies, Discounted Cash Flow (DCF) model is used and Terminal Value (TV) model is applied to forecast future costs and incomes of companies’ activities in a stable manner. Systematic Risks of these companies are taken into account by using Capital Asset Pricing Model (CAPM). At the end, five Iranian electricity distribution companies are selected and considered technically and economically to obtain their valuations. As a result, these companies are ranked based on their valuations and technical factors with expert weights.